The IRS has proposed removing 298 regulations, which are considered unnecessary, duplicative or obsolete. In addition, the Treasury proposes to amend another 79 regulations to reflect the proposed removal of the regulations. The regulations affected by this proposed rulemaking include retirement plan regulations.

Background

The Treasury began reviewing IRS regulations in response to two Executive Orders (EOs) issued in 2017. The first EO directed each agency to establish a Regulatory Reform Task Force (E.O. 13777, see Pension Plan Guide Newsletter, Issue No. 2248, March 14, 2017). In addition, each Regulatory Reform Task Force was directed to review existing regulations to determine which, among other things, were outdated, unnecessary or ineffective.
The second EO directed the Treasury to review all significant tax regulations issued on or after January 1, 2016 (E.O. 13789, see Pension Plan Guide Newsletter, Issue No. 2256, May 9, 2017). Accordingly, on June 22, 2017, the Treasury issued an interim report identifying eight regulations to be revised or withdrawn. On October 2, 2017, the Treasury issued a second report, noting that the IRS Office of Chief Counsel had identified over 200 regulations for potential repeal.

Unnecessary, obsolete regs

The regulations to be repealed fall into three categories:

Regulations interpreting Code provisions that have been repealed;

Regulations interpreting significantly revised Code provisions that do not reflect the revisions; and

Regulations that are no longer applicable.

These regulations’ removal is unrelated to the substance of rules they contain. Therefore, there is no negative inference regarding the stated rules, according to the IRS. The IRS proposes to remove these regulations from the Code of Federal Regulations solely because they have no current or future applicability. In addition, the IRS’s repeal of these regulations is not intended to alter any nonregulatory guidance that cites to or relies upon them.
The IRS also proposes to amend 79 existing regulations to remove cross-references to the 298 removed regulations. According to the IRS, these amendments will streamline and reduce the volume of regulations taxpayers need to review and increase clarity of the tax law.
Retirement-related regulations affected by these changes include regulations under Code Secs. 401, 402, 403, 404, 405, 410, 411, 412, 414, and 416. These regulations will be removed as of the date the Treasury decision adopting these proposals is published in the Federal Register.

Comments requested

Written or electronic comments and requests for a public hearing must be received by May 14, 2018. Comments should be mailed to: CC:PA:LPD:PR (REG-132197-17), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Also, submissions may be hand-delivered between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-132197-17), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC, or sent via the Federal eRulemaking Portal at www.regulations.gov (REG-132197-17).